Crawford Enterprise publicly held company with two divisions, manufacturing and distributionBoth divisions the same target debt ratio of 30%. The cost of debt financing is 7% before a marginal tax rate of 25%The risk free rate of interest on long term Treasury bonds is currently 5% and the market risk premium averaged 4% over the past several years. The comparable firms in the manufacturing division have equity betas of about 1.6. In contrastdistribution companies typically have equity betas of only 1.1. What the divisional cost capital for manufacturing ?
Crawford Enterprise publicly held company with two divisions, manufacturing and distributionBoth divisions the same target debt ratio of 30%. The cost of debt financing is 7% before a marginal tax rate of 25%The risk free rate of interest on long term Treasury bonds is currently 5% and the market risk premium averaged 4% over the past several years. The comparable firms in the manufacturing division have equity betas of about 1.6. In contrastdistribution companies typically have equity betas of only 1.1. What the divisional cost capital for manufacturing ?
Given the same information Crawford Enterprise publicly held company with two divisions, manufacturing and distributionBoth divisions the same target debt ratio of 30%. The cost of debt financing is 7% before a marginal tax rate of 25%The risk free rate of interest on long term Treasury bonds is currently 5and the market risk premium averaged over the past several years. The comparable firms in the manufacturing division have equity betas of about 1.6. In contrastdistribution companies typically have equity betas of only 1.1. Which of the two projects should the firm undertake?? (Assume the target WACC of the firm is 9%)
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